Brian Pitz and Brian Fitzgerald, analysts for UBS believe AOL may finally be turning things around, predicting that the company will have earned $532 million in Q3 revenue, ahead of industry expectations set at $525 million. In their report the men write, “[T]he turnaround is gaining traction faster than expected.”

Both men believe that AOL’s domestic display sales have led to higher revenue after year-over-year growth of 21% for the quarter, up from just 15% in Q2 2011.

In August AOL warned that display sales would slip, leading to a weakening of their share price.

The UBS analysts also wrote about AOL owned hyperlocal news website Patch which currently costs AOL $40 million per quarter. UBS believes the site can be monetized for a profit however they have not released any predictions at this time.

For their part AOL has slowed down the number of new patch sites being launched after first promising 1,000 towns by the end of 2011.